Electric commerce began in the mid 1990's and grew rapidly until 2000. You heard about the dot-com bust? Well 200o is when it hit. Everyone had money tied up in these businesses, and they all lost it. Luckily around 2003, e-commerce was revived and done the right way.

There are several different forms of e-commerce. B2C (business to consumer), B2B (business to business), B2G (business to government), and C2C (consumer to consumer). These categories distinguish the relationship the parties have.

After the "rebirth" of e-commerce, it went global and comanies learned from their previous mistakes. Companies used their own funds rather than borrowing it. Internet connectivity had improved greatly, and almost everyone had access to the Web. Businesses increased their interactivity with the customers and built a trusting relationship with them. E-mail and online advertising became the voice of on-line companies, and downloading became a fast and easy way to get your merchandise.

A business model is a set of processes that combine to yield a profit. Each company's model is different and should be modified to suit that specific business's needs. Another handy model to create is a revenue model. This model is a specific collection of business processes used to identify, market to, and generate sales to customers. There are many different processes involved with a business. The Internet has been essential in lowering the costs involved with these. It has saved many businesses time, as well. It is important for firms to realize the benefits of e-commerce and adapt to the change to benefit their businesses.

There are several things to consider when deciding if selling products on the Web is for you. One is the product's suitability to the Web. Good candidates are items which customers do not need to experience the physical characteristics of before they buy it. Books, CD's, software, etc are examples of physical items that are suited for the Web. Services are also very suitable, as there is no physical presence to inspect before you purchase. You shouldn't sell low-cost items or those that require an impulsiveness to buy. Another consideration is shipping. If an item is very difficult or expensive to ship, that eats into your profits. Another consideration is how many different items you have and are they all different sizes and weights. Again this could prove costly to your firm.

Economics is the study of how people allocate resources. One major way that people can allocate resources is through commerce. Most commerce today generally occurs through firms or companies. These businesses have a heirarchical structure, which includes a CEO, executives, middle managers, and regular employees. This structure is beneficial to firms because it helps lower transaction costs, which are the total of all costs that a buyer and seller incur as they gather information and negotiate a purchase-sale transaction.

The switch from markets to this heirarchical form of economic organization eliminated many of the middle guys. It basically took all the key players (from the suppliers to the sales people) of a transaction and put them in one place. This lowered transaction costs tremendously and also helped keep an eye on the quality of your product. Although there are some commodities that are still traded in markets, they are in areas where high transaction costs are not a factor.

E-commerce is a great way to reduce transaction costs by improving the flow of information and increasing the coordination of actions. The Internet enables businesses to search for suppliers, investors, and customers quickly and inexpensively. Creating strategic alliances with other firms on the Web is a great way to increase revenue. Another way to reduce these costs with e-commerce is through telecommuting. Allowing employees to work from home reduces overhead.

There are so many opportunities for improving your business through the use of e-commerce, it is sometimes difficult to decide where and how to use them. A value chain is a way of organizing your activities to decide which areas you should focus on. The primary activities include identifying customers, overall design, supply purchasing, production, marketing, delivery, and customer support. The importance of each activity are dependent on the type of product or service you are trying to sell. Determing where your business fits in the industry is another important factor to consider when doing business on the Web. If you determine that your industry can benefit from e-commerce, it can reduce costs, improve product quality, reach new customers or suppliers, and create new ways to sell existing products. The value chain can be an excellent way to organize the business processes within the business and the product's life cycle.

Once you have identified the business's value chain, you can break it down into strategic business units and use SWOT analysis to analyze and evaluate business opportunities. SWOT involves an analyst looking into the business unit and identify the strengths, weaknesses, opportunities and threats and formulating strategies to take advantage of opportunities.

The Internet has given us the ability to connect to computers all over the world so any business that engages in electronic commerce automatically becomes an international business. There are several issues that arrive when you are in a global environment, including trust, culture and language. These are all very sensitive issues and can make or break a business in other countries.

Trust is important in any relationship, but more so with other countries. It is important to let consumers in these countries know who you are, so you are not a "stranger". Language barriers are a huge issue in international e-commerce. If you want to appeal to customers who do not speak your language, then you must speak theirs. You can run into issues getting a site translated, and it can be quite costly, so be wise about it. Cultural issues may arise as well. you can offend someone if you offend their culture. A cow in a Muslim country is a no-no. You must make sure that if your target market is in another country, your site completely conforms to their rituals, customs, beliefs, and language. If you are consistently putting your customers needs first, you will build the trust you need to be successful in an international market.